We are all being killed by high Federal rates. But just because some people live in a State that chooses to tax the shit out of them doesn't mean you should pay less tax than those in low tax states.
But thanks for not resorting to name calling and insults.
As for Stan, YES, I do think Federal tax should be fair. Which is completely different than the liberal mantra of everyone paying their "fair share, which has nothing to do with fairness. Let me ask you, Stan, Other than greed, why do you think your State taxes deserve to be deductible on your Federal return?
I could discuss this in further depth, but I don't like the tone the discussion took.
The state tax deduction has been in the Code since the inception of the Sixteenth Amendment in 1913, and was even in the law in 1862 when the Congress tried to impose its first income tax to fund the Civil War.
There is a public policy position that a citizen's income shouldn't be taxed twice. In other words, if the federal government taxed a citizen's disposable income, income confiscated at the state level is no longer available as disposable income, and shouldn't be subject to double taxation.
Further, it's not just one's home state income tax. S Corps and Partnerships that operate in multiple states require their owners to file tax returns in most of those states, or file "composite" returns for the business income. I have two clients that file in 26 and 38 jurisdictions respectively. This is not at all uncommon for manufacturers, wholesalers, or distributors that have "nexus" in multiple states.
These state taxes are not deductible as business expenses on the S or LLC returns. They are treated in all respects as itemized deductions on the S Corp shareholder or LLC member's Schedule A. Those business state income tax payments will be lost deductions in this tax reform, effectively increasing the taxable income on the businesses. And if these businesses are not those eligible for the reduced flow through rate, such as professional service firms, there will be no reduced tax rate to offset the increase in income. It will be a net tax increase for the owners of those businesses.
It's not greed, it's fairness. For 104 years state tax deductions were an integral part of the Tax Code. Now Paul Ryan is calling such things "loopholes", which makes him no different than leftists such as Chuck Schumer and even Republicans choosing to demagogue this issue.